October 21, 2019

1st Fiscal Period (Ended August 2019)
Financial Results Briefing Materials

AssetManagement
CompanySANKEI REAL ESTATE Inc.

Table of Contents
Executive Summary……P2

1. Management Highlights……P3

2. Future Growth Strategies…… P132-1 External Growth Strategy…… P142-2 Internal Growth Strategy…… P16

2-3 Financial Strategy…… P18Topics…… P20Appendix…… P21

Disclaimer
This document is intended for the purpose of providing information on SANKEIREAL ESTATE Inc. (hereinafter, “SANKEI REAL ESTATE”), and is not intended forthe purpose of soliciting investment in or recommending the trading of specificproducts. Please consult your securities company for any purchase of SANKEIREAL ESTATE investment units. When making any investment, investors do so attheir sole discretion and risk. The information provided in this document is ananalysis or a judgment made by Sankei Building Asset Management Co., Ltd.
(hereinafter, “Sankei Building Asset Management”) based on information
currently available to Sankei Building Asset Management, and Sankei Building
Asset Management does not guarantee and is not liable whatsoever for theaccuracy, reliability, integrity, etc. thereof. In addition, the content may bechanged or abolished without prior notice. The content of this document
contains earnings forecasts and other forward-looking statements. These
forward-looking statements are not a guarantee of future business performanceor financial content of SANKEI REAL ESTATE. All rights to any part of thisdocument belong to Sankei Building Asset Management, and no part of thisdocument shall be used, cited, reproduced, altered, disassembled, transmitted,
etc. by any means, electronic or mechanical, for any purpose without
permission. This document is not a disclosure document based on the Financial
Instruments and Exchange Act. Please contact below if you have any inquiries
concerning this document.
SANKEI BUILDING ASSET MANAGEMENT CO., LTD.
Finance & IR Department
Phone: ＋81-3-5542-1316

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SANKEI REAL ESTATE Inc.

Executive Summary
Management Highlights• Conducted the 1st Public Offering at the earliest timing after listing among J-REITs
specializing in office buildings.
• Portfolio operated with 100.0% occupancy rate. Steady rent revision for office buildings
at present.
• 1st FP performance:
Distribution per unit was 1,399 yen, up 278 yen (+24.8%) from the initial forecast.
Future Growth Strategies• External Growth Strategy:
Short-term asset size target (100 billion yen) is within reach; no change to early
expansion plan.

• Internal Growth Strategy:
Rent gap expanded further. More effort will be put into realizing internal growth.
• Financial Strategy:
Established a more stable financial base through lender composition centering on megabanks. Will work to extend average remaining time to maturity going forward.
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SANKEI REAL ESTATE Inc.

1. Management Highlights

3

SANKEI REAL ESTATE Inc.

Realization of Early Expansion of Asset Size Through Public Offering
Conducted the 1st Public Offering at the Earliest Timing After Listing
among J-REITs Specializing in Office Buildings

Conducted the 1st Public
Offering at the earliest timing*1
after listing among J-REITs
specializing in office buildings*2<Target asset size>
200 billion yen to
300 billion yen<Target asset size>
100 billion yen

67.3 billion yen
Expanded byaround 1.6 times
43.4 billion yen
4.9
months*3

IPO
End of 1st FP
第1期末Approx.
0.5 to 1 year

After
1st Public Offering
第1回 公募増資後

Approx.
1.5 to 3 years

Short-term
短期目標
targetMid-term
中期目標
target*1. Based on the period from the listing date to the date on which the first public offering was resolved.
*2. “J-REITs specializing in office buildings” refers to J-REITs for which the property sector is categorized as “office” in the component stock information, etc. of Tokyo Stock Exchange REIT Property Sector IndexSeries dated April 5, 2019 (excluding those for which the property sector was changed to a sector other than “office” after public offering).
*3. Calculated by dividing the actual number of days from the listing date to the date on which the first public offering was resolved by 30.
*4. The short-term and mid-term asset size targets above are solely the targets, and neither the achievement of the targets nor the timing of achievement are definite or guaranteed.
Furthermore, the timing of achievement of the targets may be delayed due to changes in the investment environment, real estate market conditions, etc. and other reasons.

4SANKEI REAL ESTATE Inc.

1st Public Offering: Expansion of Portfolio Maintaining Quality (1)Before public offering

1st Public Offering

After public offering

Number of properties

8 properties

4 properties*1

11 properties

Asset size
(Total acquisition price)

Approx. 43.4 billion yen

Approx. 23.9 billion yen

Approx. 67.3 billion yen

Acquisition price /property

Approx. 5.4 billion yen

Approx. 6.0 billion yen

Approx. 6.1 billion yen

Average appraisal NOI yield*2

4.1%

4.3%

4.2%

Average occupancy rate

100.0%

100.0%

100.0%

Average building age*3

16.1 years

14.9 years

15.7 years

Base date: August 31, 2019+－

Portfolio PML

1.6%

1.6%

Investment ratio byasset type

Office buildings 79.4%
Sub assets
20.6%

Office buildings 80.8%
Sub assets
19.2%

Focused investment area
100%

Focused investment area
94.1%

Tokyo 23 wards 80.2%
Osaka City
19.8%
Others－Tokyo 23 wards 74.6%
Osaka City
19.5%
Others5.9%(on acquisition price basis)

Investment ratio bygeographic area
(on acquisition price basis)*1. Includes additionally acquired properties.
*2. The figures are the weighted average based on the acquisition price of each property with net operating income derived by direct capitalization method stated in the real estate appraisal report as the base,with the appraisal date of October 31, 2018, for properties under “Before public offering”; July 1, 2019 for properties under “1st Public Offering”; August 31, 2019, for the 8 properties acquired “Before
public offering” among those under “After public offering”; and July 1, 2019, for the 4 properties acquired through the “1st Public Offering” among those under “After public offering.”*3. Weighted average based on acquisition price of each property is indicated, rounded to one decimal place.

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SANKEI REAL ESTATE Inc.

1st Public Offering: Expansion of Portfolio Maintaining Quality (2)Percentage by Typical Floorplate (Area)(based on acquisition price)Percentage by Walking Time to the Nearest Station(based on acquisition price)

Within 5 minutes
94.4%

200 tsubos or more
73.2%
5.6%
13.0%

26.8%

Average*309.85tsubosAverage*
2.6
minutes

47.2%

16.1%
81.4%

9.9%
400 tsubos or more

Within 3 minutes

300 tsubos or more

Within 5 minutes

200 tsubos or more

More than 5 minutes

Less than 200 tsubos

Office Buildings Only

* Figures are the weighted average based on the acquisition prices (rounded to one decimal place).

All Properties

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SANKEI REAL ESTATE Inc.

(Reference) Overview of the 1st Public OfferingOverview of the 1st Public Offering
Resolution date

Change in the Investment Unit Price from the
Resolution Date to the Price Determination Date

August 6, 2019

128,000 yen
Price determination dateAugust 21, 2019

Number ofinvestment units offered

117,200 units(Including 5,581 units (maximum) offered through over-allotment)

124,000 yen

356,800 units*

120,000 yen

Number of investment units
issued and outstanding

126,000 yen

Up-down rate of the investment unit pricefrom the resolution date to the pricedetermination date

122,900 yen

8,000 units
7,000 units+5.6% (+6,500 yen)

6,000 units

122,000 yen

5,000 units
4,000 units

118,000 yen
Issue price

118,734 yen per units
116,000 yen

Issue amount

114,471 yen per units

Total issue amount

Approx. 12.8 billion yen* With the exercise of green shoe option, all 5,581 units were issued through third-party allotment
and the number of investment units issued and outstanding came to 356,800 units as a result.

9,000 units

3,000 units
116,400 yen

2,000 units

114,000 yen

1,000 units

112,000 yen

0 units

Volume (right axis)

Investment unit price (left axis)

Acquired Properties (4 properties: Acquisition Price of 23.9 Billion Yen) —Assets Acquired in the 2nd Fiscal Period—
Sub Assets

Office Buildings

Shinagawa Seaside TS Tower(Shinagawa-ku, Tokyo)

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Omori Park Building(Ota-ku, Tokyo)

Hotel Intergate Hiroshima(Naka-ku, Hiroshima-shi)

25% quasi co-ownershipinterest in sectional
ownership of the building,etc.

15% quasi co-ownershipinterest in sectional
ownership of the officeportion of the building, etc.
(Additional acquired portion)

10,040

4,500

5,400

3,990

million yen

million yen

million yen

million yen

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SANKEI REAL ESTATE Inc.

NAV per Unit*1 on Increase
NAV based on appraisal value at the end of the 1st FP surpassed that at the end of the interim period of the 1st
FP by 11.7%.
With the 1st Public Offering conducted in the 2nd FP, NAV is expected to surpass that at the end of the 1st FP by
2.9% after acquisition of properties.
+2.9% +14.9% 112,744(yen per unit)

109,583+11.7%

110,000
110,000

100,000
100,000

98,10596,17590,00090,00080,00080,000End of interim
period of 1st FP End of interim
period of 1st FP
第1期中間期末
第1期中間期末
Book value(End of April 2019)（2019年4月末）(End帳簿価額
of April 2019)（2019年4月末）

Endof 1st FP
第1期末(End of August 2019)（2019年8月末）

NAV multiple*2

1.11x*1. NAV per unit = (Net assets + Unrealized gain on appraisal basis) ÷Number of investment units issued and outstanding*2. NAV multiple = Investment unit price (122,100 yen) on August 30, 2019 ÷NAV per unit at the end of 1st FP*3. NAV after considering the property acquisition in 2nd FP is an estimated figure calculated taking into account the acquisition price of properties
acquired in the 2nd FP, their appraisal values at acquisition and the increase in net assets due to issuance of new investment units, based on NAV of
the 1st FP.

After considering
第2期取得資産考慮後
property acquisition in（推定値※3）
2nd FP(Estimate*3)

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SANKEI REAL ESTATE Inc.

Internal Growth in 1st Fiscal Period (Ended August 2019)
Portfolio Operated with 100.0% Occupancy Rate. Steady Rent Revision for Office Buildings at Present.
Occupancy Rate (as of August 31, 2019)
Office buildings(7 properties)

Sub assets(1 property)

Entire portfolio(8 properties)

100.0%
100.0%
100.0%* The figures are for the assets under management (8 properties in total).
* The occupancy rate indicates the occupancy rate of assets under management after considering SANKEIREAL ESTATE’s ownership interest (rounded to one decimal place).

Rent Revision Performance of Office Buildings*1 (March 12, 2019 to August 31, 2019; Based on Concluded Contract)<Properties/Tenants with Rent Revision (Including New Replacements>
 Number of properties: 3
 Number of tenants: 9
 Leased area: Approx. 369 tsubos

Increase*4
7 contracts (approx. 277 tsubos)

Rate of increase*4

Breakdown of upward rent revision

Renewal with revision/renewal
4 contracts (approx. 182 tsubos)(Percentage*5 66%)

25.1%*3+14.9%+18.5%

Increase

74.9%*3

New replacement
3 contracts (approx. 94 tsubos)(Percentage*5 34%)

+23.3%

No change*1. “Office buildings” refers to 7 office properties among the assets under management for the 1st FP.
*2. The areas indicated are the areas of assets under management after considering SANKEI REAL ESTATE’s ownership interest (rounded down to the nearest whole number).
*3. These are the percentages when the area leased to tenants who had rent revisions (including new replacements) (approx. 369 tsubos) is deemed 100%.
*4. Based on the actual rent taking into account rent-holiday services.
*5. These are the percentages when the area leased to tenants who had upward rent revisions (approx. 277 tsubos) among tenants who had rent revisions(including new replacements) is deemed 100%.

9SANKEI REAL ESTATE Inc.

Financial Summary for 1st Fiscal Period (Ended August 2019)
Distribution per Unit Was 1,399 yen, up 278 yen (+24.8%) from the Initial Forecast
Accounting period

1st FP
Forecasts (A)

1st FP
Results (B)Major Factors for the Difference
Difference (B)-(A)Announced on August 6, 2019

Operating revenue

1,154 million yen

1,157 million yen

3 million yen

Operating expenses

516 million yen

457 million yen-58 million yen

Expenses related to leasing
business [Total]

335 million yen

315 million yen-20 million yen

Management fee

91 million yen

98 million yen

6 million yen

Utilities expenses

59 million yen

68 million yen

9 million yen

Repair expenses

27 million yen

10 million yen-16 million yen

Property taxes

0 million yen

0 million yen

0 million yen

Depreciation

121 million yen

123 million yen

2 million yen

Other expenses

35 million yen

13 million yen-21 million yen

Other than expenses related
to leasing business [Total]

180 million yen

142 million yen-38 million yen

Asset management fee

104 million yen

105 million yen

1 million yen

Other expenses

76 million yen

36 million yen-39 million yen

Operating profit

638 million yen

699 million yen

61 million yen

Non-operating expenses

368 million yen

363 million yen-5 million yen

Ordinary profit

269 million yen

336 million yen

67 million yen

Profit

268 million yen

335 million yen

67 million yen

1,399 yen

278 yenDistribution per unit
* Figures are rounded down to the indicated digits.

1,121 yen

1st FP Results(compared with 1st FP forecast)(million yen)

Operating revenue +3• Mostly as forecast(Tokyo Sankei Plaza: Restaurant revenue +2)

Expenses related to leasing business -20• Management fee +6(Inclusion of transferred PM fee +16,
BM fee -10→Transferred to utilities expenses)• Utilities expenses +9(Transferred from management fee)
• Repair expenses -16(Deferred to next FP and after -10, Reduction -3,
Unused reserve -3)• Other expenses -21(Recorded PM fee in management fee -16,
Other unused reserve, etc. -5)
Other than expenses related to leasing business -38• Decrease in outsourcing expenses, etc.

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SANKEI REAL ESTATE Inc.

Earnings Forecasts for 2nd Fiscal Period (Ending February 2020)

1st FP(ended Aug. 2019)
Results (A)

2nd FP(ending Feb. 2020)
Forecasts (B)

3rd FP(ending Aug. 2020)
Forecasts (C)

4th FP(ending Feb. 2021)
Forecast (D)Operating revenue

1,157 million yen

1,951 million yen

2,005 million yen

2,025 million yen

Operating expenses

457 million yen

850 million yen

1,076 million yen

1,093 million yen

Expenses related to leasing
business [Total]

315 million yen

645 million yen

828 million yen

843 million yen

Management fee

98 million yen

161 million yen

161 million yen

161 million yen

Utilities expenses

68 million yen

122 million yen

122 million yen

122 million yen

Repair expenses

10 million yen

63 million yen

60 million yen

71 million yen

Property taxes

0 million yen

23 million yen

215 million yen

215 million yen

Depreciation

123 million yen

217 million yen

207 million yen

209 million yen

Other expenses

13 million yen

56 million yen

61 million yen

62 million yen

Other than expenses related
to leasing business [Total]

142 million yen

205 million yen

247 million yen

249 million yen

Asset management fee

105 million yen

135 million yen

177 million yen

174 million yen

Other expenses

36 million yen

69 million yen

69 million yen

75 million yen

Operating profit

699 million yen

1,100 million yen

928 million yen

932 million yen

Non-operating expenses

363 million yen

140 million yen

86 million yen

84 million yen

Ordinary profit

336 million yen

960 million yen

842 million yen

848 million yen

Profit

335 million yen

959 million yen

841 million yen

847 million yen

Accounting period

Major Factors for the Difference
2nd FP Forecasts(compared with 1st FP)• Increase in leasing business revenue due to assets
acquired in the 2nd FP

3rd FP Forecasts(compared with 2nd FP)• Increase in leasing business revenue due to an end ofrent-free periods of some tenants during the 3rd FP• Increase in expenses related to leasing businessdue to recording of fixed assets tax for assets
acquired in the 1st and 2nd FP as expenses

4th FP Forecasts(compared with 3rd FP)• Increase in leasing business revenue due to fullcontribution from some tenants whose rent-free
period ends

Distribution per unit
1,399 yen
2,689 yen
2,358 yen
2,374 yen
*1. Distribution per unit for the 2nd FP and after is under the assumption that there will be no change to the number of investment units issued and outstanding (356,800 units).
*2. No cash distribution in excess of earnings is planned to be made at this point in time.
*3. Figures are rounded down to the indicated digits.

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SANKEI REAL ESTATE Inc.

Results and Forecasts of Distribution per Unit
Increase in the number of daysin asset management period,
effect of asset size expansion,
decrease in offering costs, etc.

(Unit: yen)

Expensing of fixed assets tax
and city planning tax, etc.

3,000

2,500

2,000

Decrease in repair expenses
due to postponement of
repair work, decrease inother operating expenses
related to operations during
the fiscal period, decrease ininvestment unit issuance
expenses, etc.

1,500

Increase in rental revenue,
etc. due to an end of rentfree period, etc.

-331

+16

+1,290

2,689
+278

2,358

2,374

第2期予想
2nd FP

第3期予想
3rd FP

第4期予想
4th FP

Forecast

Forecast

Forecast

1,000

1,399

500

1,121
0
第1期末予想Endof 1st FP
Forecast

第1期末実績
Endof 1st FP
Result12

SANKEI REAL ESTATE Inc.

2. Future Growth Strategies

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SANKEI REAL ESTATE Inc.

2-1 External Growth Strategy (1)Short-term Asset Size Target (100 Billion Yen) Is Within Reach;
No Change to Early Expansion Plan

<Target asset size>
200 billion yen to
300 billion yen
Aim for inclusion in
global indexes<Target asset size>
100 billion yen
Prepare for
AIFMD registration

FTSE EPRA/Nariet
Global Real Estate Index

Launch a move toobtain credit rating

FTSE Global All Cap Index

67.3 billion yen
43.4 billion yen
4.9 months

IPO
End of 1st FP
第1期末Approx.
0.5 to 1 years

After
the 1st Public Offering
第1回 公募増資後

Approx.
1.5 to 3 years

Short-term
短期目標
target* The short-term and mid-term asset size targets above are solely the targets, and neither the achievement of the targets itself nor the timing ofachievement are definite or guaranteed.
Furthermore, the timing of achievement of the targets may be delayed due to changes in the investment environment, real estate market conditions,etc. and other reasons.

Mid-term
中期目標
target14

SANKEI REAL ESTATE Inc.

2-1 External Growth Strategy (2)Promotion of Optimization of Revenue Structure for Portfolio by Fully Utilizing Sponsor Pipeline
Pipeline from Sponsor
Development Capability with Strong Expertise Deploying many staff members with extensive experience in development
 Developing various types of assets including large-scale redevelopments
 Developing branding strategies foroffice buildings and hotels

SANKEI REAL ESTATE’s
Property Selection Criteria
Pursuit of Opportunities for Internal Growth Properties with room for internal growthTokyo Sankei Building
BREEZÉ TOWER
S-GATE NIHONBASHI-HONCHOS-GATE AKIHABARA
Hibiya Sankei Building
Shinagawa Seaside TS Tower

Pursuit of Profitability and Stability

Strong Sourcing
 Deploying many staff members with extensive experience in acquisition
 Acquiring properties on a negotiation basis or through a closed bid

 Quick decision-making to capture the right timing Ability to discern properties that meet the criteria for selecting properties
for SANKEI REAL ESTATE Sharing acquisition plans with SANKEI REAL ESTATE through in-depth
simulation

Asset Management Company’s Independent Sourcing

 Properties with limited internal degeneration,
supported by specific demand, etc.
 Properties with relatively high yield considering
the property competitiveness, that contribute torevenue structureHatchobori Sankei Building
Toyo Park Building
Omori Park Building

Pursuit of Long-Term Stability
 Properties that can secure stable revenue overthe long term based on a long-term fixed-rentagreement, etc.
 Hotel Intergate Tokyo Kyobashi
 Hotel Intergate Hiroshima

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SANKEI REAL ESTATE Inc.

2-2 Internal Growth Strategy (1)Rent Gap Expanded Further. More Effort Will Be Put into Realizing Internal Growth.
Rent Gap*1 (for typical floorplate)Contract Revision/Renewal Schedule for
2nd Fiscal Period (Ending February 2020) (Planned) Onward

After public offering (for 9 office properties)-11.8%-14.4%

As of May 31, 2019

As of September 30, 2019

Total leased area*2 (9 office properties):
14,470 tsubos (after considering SANKEI REAL ESTATE’s ownership interest)
100%
90%

(on total rent basis; weighted average)

80%(Reference) Change in Rent Gap
Oct. 2018

May 201970%
May 2019

Sep. 2019

60%

0.0%

50%
40%

-5.0%

34.3%

30%
-10.0%-15.0%-8.3%

20%-12.3%-11.8%

10%-14.4%
0%-20.0%

Assets under management in
1st FP(7 office properties)

14.5%
10.3%

Assets under management
after public offering(9 office properties)

1,495
tsubos
2nd FP
2020年2月期(ending February 2020)
（第2期）

4,966
tsubos2,096
tsubos
3rd FP
2020年8月期(ending August 2020)（第3期）

4th FP
2021年2月期(ending February 2021)（第4期）*2. The figure is as of September 30, 2019. For properties for which Sankei Building is the master lessee,
the areas stated in the lease agreements which Sankei Building (the master lessee) has concluded
with end tenants are used as areas leased to the end tenants when calculating.
*3. The percentages above are based on the total leased area for the 9 office properties owned by*1. “Rent Gap” refers to the figure arrived at when the amount of difference between the
SANKEI REAL ESTATE (after considering SANKEI REAL ESTATE’s ownership interest) as of September
average rent for SANKEI REAL ESTATE’s office building portfolio and the market rent
30, 2019, being 100%.
calculated based on assumed new contract rent (typical floorplate) as stated in a market
report prepared by CBRE K.K. is divided by the market rent.
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SANKEI REAL ESTATE Inc.

2-2 Internal Growth Strategy (2)Focus Properties in the 2nd Fiscal Period Onward (Understanding of Market and Leasing Policy)
Hibiya Sankei Building
Focused Property

 The market of the Yurakucho area where the property is located is favorable.
With a tight supply-demand balance, there is ample room for rent to rise,especially for small- to medium-sized buildings.

 The market of the Umeda area where theproperty is located is favorable. With solid
tenant needs and limited new supply, thesupply-demand balance is likely to remaintight for the time being.

 The appeal of the property is strengthened by its scarcity in location in being
directly connected to the nearest station and standing in close proximity to
the Imperial Palace and Hibiya Park, as well as by the increasing potential of
the area due to redevelopment of the surrounding area. With such, we are
putting efforts into revising contracts to increase the rent of tenants whose
rent deviates from the market rent.

BREEZÉ TOWER

 While keeping a close watch on the status ofcompetitive properties, we will promote theattractiveness of the building carefully as alandmark of Nishi-Umeda and negotiate
upward rent revision as a precondition.

Shinagawa Seaside TS Tower

Focused Property

 The market of the Higashi-Shinagawa area
where the property is located is favorable.
As the market sees a tight supply-demandbalance, rent is on an upward trend
compared with before.
 Based on the current market environment
and the probability of occupying tenants’continuous occupancy presumed from theirbusiness strategies, we will negotiate
upward rent revision as a precondition.

Toyo Park Building Although the market of the Toyocho area where the property is located saw
a number of vacancies push up the vacancy rate at one point, thosevacancies have been filled and the vacancy rate now maintains a low level.
 The property has captured tenant needs since it provides a cost advantage
as a business hub in the Joto area, which has excellent accessibility tocentral Tokyo. With stable management in mind, we will seek opportunities
to increase rent amidst careful negotiation.

Omori Park Building The market of the Omori area where the property is located is favorable.
The supply-demand balance is likely to remain tight for the time being.
 The characteristics of the property’s location meet the needs of tenants whoemphasize use of cars and convenient access to Haneda Airport.
Accordingly, we will negotiate while showcasing the location which tenants
seeking cost advantages will favor in addition to the scarcity of the property
which has over 300 tsubo of typical floorplate and reasonable rent.

17

SANKEI REAL ESTATE Inc.

2-3 Financial Strategy (1)Established a More Stable Financial Base Through Lender Composition Centering on Mega Banks.
Will Work to Extend Average Remaining Time to Maturity Going Forward.
Financing Highlights (as of October 7, 2019)

LTV Ratio During Normal Operations
Policy is to maintain an approximate range of 40% to 50%

Balance ofinterest-bearing liabilities

34.56
billion yen

LTV ratio*1

Ratio oflong-term debt

84.5%

Ratio offixed-rate debt

53.5%

Averagefinancing interest rate*2

0.32%

Averageremaining time to maturity

2.6years

45.8%
End of 2nd FP

End of 3rd FP

End of 4th FP

46.0%

45.6%

45.6%

LTV *3*3. A portion (613 million yen and 456 million yen) of borrowings is assumed to be repaid earlyusing the refund of consumption taxes to be received as the source of funds for the
repayment.

*1. “LTV ratio” is total interest-bearing liabilities divided by total assets, rounded to one decimal place.
*2. “Average financing interest rate” is the average of applicable interest rates at October 7, 2019.
Calculations are on an interest payable basis and do not include arrangement fee and otherborrowing related expenses.

Maturity Ladder for Interest-Bearing Liabilities

Lender Composition
Established stable bank formation through financing from 7 leading
financial institutions of Japan(million yen)

10,000

Short-term funds
Long-term funds

8,000
6,000
5,600 5,900

4,000

Mizuho Bank, Ltd.
28.39%

Sumitomo Mitsui Trust Bank, Ltd.
9.26%

5,900

4,800

4,913

3,700
2,000

3,300

456
0

Resona Bank, Ltd.
8.04%
Shinsei Bank, Limited
8.04%

2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP 9th FP 10th FP 11th FP
第2期 第3期 第4期 第5期 第6期 第7期 第8期 第9期 第10期 第11期

Mizuho Trust & Banking Co., Ltd.
10.24%Development Bank of Japan Inc.
16.20%

Sumitomo Mitsui Banking
Corporation
19.83%

18

SANKEI REAL ESTATE Inc.

2-3 Financial Strategy (2)Status of Lenders (as of October 7, 2019)
LenderShort-term borrowings

Mizuho Bank, Ltd.

Interest
rate*1Maturity
date*2

Repayment
methodDescription

Term

1,167

LenderBorrowingamount(million yen)Mizuho Bank, Ltd.

972

Sumitomo Mitsui Banking Corporation

832

Sumitomo Mitsui Banking Corporation

716

Development Bank of Japan Inc.

713

Development Bank of Japan Inc.

614

Mizuho Trust & Banking Co., Ltd.

456

Mizuho Trust & Banking Co., Ltd.

392

Sumitomo Mitsui Trust Bank, Ltd.

416

Sumitomo Mitsui Trust Bank, Ltd.

358

Shinsei Bank, Limited

358

Shinsei Bank, Limited

324

Resona Bank, Ltd.

358

Resona Bank, Ltd.

324

Mizuho Bank, Ltd.

409

Mizuho Bank, Ltd.

856

Sumitomo Mitsui Banking Corporation

204

Mar. 12,2020

Sumitomo Mitsui Banking Corporation

639

Mizuho Bank, Ltd.

304

548

Sumitomo Mitsui Banking Corporation

152

Sep. 3,2020

Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.

350

Sub total

5,369

Sumitomo Mitsui Trust Bank, Ltd.

319

Shinsei Bank, Limited

294

Resona Bank, Ltd.

294

Mizuho Bank, Ltd.

2,250

Sumitomo Mitsui Banking Corporation

1,500

Mizuho Bank, Ltd.

Long-term borrowings

Borrowingamount(million yen)

0.21727%(floating)Mar. 12,2020
Lump-sum
repayment atmaturity

0.22727%(floating)
0.22727%(floating)UnsecuredNon-guaranteed

Long-term borrowings

Term

1,331

Sumitomo Mitsui Banking Corporation

929

Development Bank of Japan Inc.

796

Mizuho Trust & Banking Co., Ltd.

509

Sumitomo Mitsui Trust Bank, Ltd.

465

Mizuho Trust & Banking Co., Ltd.

620

Shinsei Bank, Limited

385

Sumitomo Mitsui Trust Bank, Ltd.

550

Shinsei Bank, Limited

490

Resona Bank, Ltd.

490

Mizuho Bank, Ltd.

950

Resona Bank, Ltd.

385

Mizuho Bank, Ltd.

1,574

Sumitomo Mitsui Banking Corporation

1,084

Development Bank of Japan Inc.

929

Mizuho Trust & Banking Co., Ltd.

593

Sumitomo Mitsui Trust Bank, Ltd.

0.24227%(floating)Mar. 12,2021

Lump-sum
repayment atmaturity

UnsecuredNon-guaranteed

Sumitomo Mitsui Banking Corporation
0.36969%(fixed)Mar. 12,
2022

2,000

542

Mizuho Trust & Banking Co., Ltd.

620

Shinsei Bank, Limited

439

Sumitomo Mitsui Trust Bank, Ltd.

550

Resona Bank, Ltd.

439

Shinsei Bank, Limited490*1. Interest rates indicated are the applicable interest rates as of October 7, 2019.
*2. If the maturity date is not a business day, it will be the following business day.

Maturity
date*20.42346%(fixed)Mar. 12,2023

0.49096%(fixed)Mar. 12,2024

0.26727%(floating)Sep. 3,2022

0.36200%(fixed)Sep. 3,
2023

Repayment
methodDescription

Lump-sum
repayment atmaturity

UnsecuredNon-guaranteed

800

Development Bank of Japan Inc.

Resona Bank, Ltd.

Interest
rate*1490

Sub total

29,200Total

34,56919

SANKEI REAL ESTATE Inc.

TopicsESG Initiatives (Ownership of Green Real Estate)
Received DBJ Green Building Certification, which certifies properties that give proper care to the environment andsociety, for 4 properties (including 2 properties for which the sponsor received certification) among 11 properties
under management
A-3 S-GATE NIHONBASHI-HONCHO

A-4 S-GATE AKIHABARA

A-1 Tokyo Sankei Building

Certification Receiver: SANKEI REAL ESTATE Inc.

Certification Receiver: SANKEI REAL ESTATE Inc.

Certification Receiver: The Sankei Building Co., Ltd.
(sponsor)(51% co-ownership interest)(2% co-ownership interest)

BREEZÉ TOWER
A-2(45% quasi co-ownership interest in sectional
ownership of the office portion of the building,
etc.)

Certification Receiver: The Sankei Building Co., Ltd.
(sponsor)

Decision on Introduction of Investment Unit Ownership Plan (October 7, 2019)<Purpose>
The introduction of the plan provides officers and employees of the asset management company and the sponsor
with opportunities to acquire investment units of SANKEI REAL ESTATE. Through such, it aims to enhance unitholder
value over the medium to long term by aligning interests of SANKEI REAL ESTATE and unitholders and to improvewelfare benefits for employees of the asset management company and the sponsor.
<Date of Introduction>
Scheduled for October 2019 (Purchase of investment units is scheduled to start in November 2019).
20

SANKEI REAL ESTATE Inc.

Appendix

21

SANKEI REAL ESTATE Inc.

Major Events Since Incorporation of SANKEI REAL ESTATE
2018
Nov.

Events

Asset
size

2019
Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Nov. 19

Mar. 12Apr. 30

Jun. 17

Incorporation of
SANKEI REAL ESTATE

Listing on TSE

End of 1st FP’s
interim period

1st FP interim financial 1st public
results briefing
offering

Aug. 6

Sep.

Oct.

Nov.

Dec.

Aug. 31

Oct. 21

Nov. 20

End of 1st FP

1st FP financial
results briefing

Start of distribution
payment

Mar. 12

Sep. 3Acquisition of 8 properties(43.4 billion yen)

Acquisition of 4 properties (23.9 billion yen)
Asset size totaling 67.3 billion yen

Listing roadshow
Visitedinstitutional
investors in Japan.

IR after listing
Visited institutional
investors in Japan.

IR on the 1st FP
interim financial
results (Japan/Asia)
Visited institutional
investors in Japan andHong Kong.

IR on the 1st FP financial
results (planned)(Japan/Asia/Australia)

Public offering road show
Visited institutional investors inJapan. Held teleconferenceswith overseas institutional
investors.

To visit institutional investors inJapan, Singapore and Australia.

IR

Other

Nikkei J-REIT Seminar(Mar. 27)

Daiwa J-REIT CaravanTokyo(Jun. 26)

Held information sessions
for individual investors

Held information sessions
for individual investors

Apr. 26

Sep. 30

Inclusion in TSE REIT Index

S-GATE NIHONBASHI-HONCHO and S-GATE
AKIHABARA receive DBJ Green Building Certification

Oct.

Nov.

Introduction of
investment unit
ownership plan
(planned)

First purchase ofinvestment units(planned)

22

SANKEI REAL ESTATE Inc.

1st Fiscal Period (Ended August 2019) Balance Sheet (unabridged)(August 31, 2019)
Unit: thousand yen
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
LandConstruction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust , net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets

1,998,469
1,432,427
326,641
38,009633,870426
4,429,846

147,558(2,657)
144,901353(4)349
2,445,779
2,130
7,735,371(121,060)
7,614,310
15,658(216)
15,442
345
(3)
341
800
(50)
749
33,982,039
23,76944,229,814(August 31, 2019)
Unit: thousand yen
Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Accounts payable - otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term borrowings
Leasehold and guarantee deposits received
Leasehold and guarantee deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed
loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

360,805
4,913,736
177,848
16,187
1,347
176,601
200,3435,846,869
17,400,000
90,922
1,920,760
19,411,683
25,258,553

23,124,900
335,209335,20923,460,109
23,460,109
48,718,662

8,593
8,593
40,38621
10,00050,40844,288,816
48,718,662

23

SANKEI REAL ESTATE Inc.

1st Fiscal Period (Ended August 2019) Statement of Income (unabridged)(From November 19, 2018 to August 31, 2019)
Unit: thousand yen

Operating revenue
Leasing business revenue
Other leasing business revenue
Total operating revenue

1,079,443
77,6381,157,082

Operating expenses
Expenses related to leasing business

315,059

Asset management fee

105,532

Asset custody fee

1,297

Administrative service fees

9,470

Remuneration for directors (and other officers)

6,000

Other operating expenses

19,995

Total operating expenses

457,355

Operating profit

699,727

Non-operating income
Interest income

14

Total non-operating income

14

Non-operating expenses
Interest expenses

35,827

Borrowing related expenses

159,201

Investment unit issuance expenses

99,593

Organization expenses

58,157

Other

10,424

Total non-operating expenses

363,204

Ordinary profit

336,537

Profit before income taxes

336,537

Income taxes - current

1,349

Income taxes - deferred(21)

Total income taxes

1,327

ProfitRetained earnings brought forward
Unappropriated retained earnings (undisposed loss)

335,209335,20924

SANKEI REAL ESTATE Inc.

1st Fiscal Period (Ended August 2019) Statement of Cash Flows(From November 19, 2018 to August 31, 2019)
Unit: thousand yen
Cash flows from operating activities
Profit before income taxes
Depreciation
Investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable – other
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in long-term prepaid expenses
Decrease (increase) in other assets
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Proceeds from leasehold and guarantee deposits received
Refund of leasehold and guarantee deposits received
Proceeds from leasehold and guarantee deposits received in trust
Refund of leasehold and guarantee deposits received in trust
Payments of leasehold and guarantee deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Proceeds from issuance of investment units
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

336,537
124,798
99,593(14)
35,827(326,641)(633,870)(38,009)126,768
159,533
176,601
200,343(40,386)(426)
220,65414(19,639)(2)
201,026(2,574,113)(41,527,340)
90,944(21)
1,927,822(7,062)(10,000)(9,400)(42,109,171)
6,010,169(1,096,433)
17,400,000
23,025,306
45,339,042
3,430,897
3,430,897

25

SANKEI REAL ESTATE Inc.

Key Performance Indicators (KPIs)
FP ended Aug.
2019

FP ended Aug.
2019

(against total assets)

45.8%

Distribution per unit

(against total assets <considering unrealized gain/loss>)

43.3%

Distribution yield

2.3%(against book value)

4.4%

ROE

2.9%

(against appraisal value)

4.1%

Net assets per unit

97,913 yen

NOI yield
after
depreciation(against book value)

3.8%

NAV per unit

109,583 yen(against appraisal value)

3.6%

Investment unit price (at end of period)

122,100 yen

Implied cap
rate(NOI yield)

3.9%

NAV multiple

1.1x(NOI yield after depreciation)

3.4%

PBR

1.2x

FFO

459 million yen

PER

43.6x

AFFO

433 million yen

FFO multiple

LTV

NOI yield

FFO per unit

1,916 yenEPS1,399 yen
*1. LTV (against total assets) = Interest-bearing liabilities / Total assets (book value)
LTV (against total assets <considering unrealized gain/loss>) = Interest-bearing liabilities /(Total assets (book value) + unrealized gain/loss)*2. NOI yield (against book value) = (Operating income from real estate leasing + Depreciation) /Book value of real estate for lease
NOI yield (against appraisal value) = (Operating income from real estate leasing +Depreciation) / Appraisal value of real estate for lease*3. NOI yield after depreciation (against book value) = Operating income from real estate leasing /Book value of real estate for lease
NOI yield after depreciation (against appraisal value) = Operating income from real estateleasing / Appraisal value of real estate for lease*4. Implied cap rate (NOI yield) = NOI (Annualized result of current FP x 2) / (Total fair value +Interest-bearing liabilities – Cash and deposits + Leasehold deposits received)
Implied cap rate (NOI yield after depreciation) = NOI after depreciation (Result of current FP x2) / (Total fair value + Interest-bearing liabilities – Cash and deposits + Leasehold deposits
received)*5. FFO = Profit + Depreciation – Gain/loss on sales of real estate properties (including loss onretirement of non-current assets)*6. AFFO = FFO – Capital expenditure*7. FFO per unit = FFO / Total number of investment units issued and outstanding at end of period*8. EPS = Profit / Total number of investment units issued and outstanding at end of period

Payout ratio

1,399 yen

31.9x
(FFO)

73.0%

(AFFO)
77.2%*9. Distribution per unit = Total distribution / Total number of investment units issued andoutstanding at end of period*10. Distribution yield = Distribution per unit (Annualized result of current FP x 2) / Investment
unit price (at end of period)*11. ROE (Return on equity) = Profit (Annualized most recent result x 2) / Net assets*12. NAV per unit = (Net assets + Unrealized gain/loss) / Total number of investment units
issued and outstanding at end of period*13. NAV multiple = Investment unit price (at end of period) / NAV per unit
*14. PBR (Price Book-value Ratio) = Investment unit price (at end of period) / Net assets per unit
*15. PER (Price Earnings Ratio) = Investment unit price (at end of period) / EPS (Annualized mostrecent result x 2)
*16. FFO multiple = Investment unit price / FFO per unit (Annualized most recent result x 2)
*17. Payout ratio (FFO) = Total distribution / FFO*18. Payout ratio (AFFO) = Total distribution / AFFO.
*19. Figures are rounded down to the indicated digits. (Percentages and multiples are rounded
to one decimal place.)26

SANKEI REAL ESTATE Inc.

Statement of Income from Leasing by Property(Actual asset management period: from March 12, 2019 to August 31, 2019)(Unit: thousand
yen)

A-1
Asset type
Property name
Actual management period

A-2

A-3

A-4

A-5

A-6

A-7

B-1

Office buildings Office buildings Office buildings Office buildings Office buildings Office buildings Office buildings
Tokyo
Sankei Building

BREEZÉ TOWER

S-GATENIHONBASHIHONCHO

173 days

173 days

173 days

Leasing business revenue

S-GATEAKIHABARA
173 days

HibiyaProperty
Sankei Building number
173 days

173 days

Sub assets

ToyoPark Building

Hotel Intergate
Tokyo Kyobashi

173 days

173 days

59,682

304,994

83,87455,179195,239

159,346

104,049

194,716

Rental revenue

50,671

228,952

77,52852,247

170,110130,133

73,651

194,716

CAM revenue

2,479

54,623--

12,735

12,975

18,617-

Utilities reimbursement

4,649

14,307

4,003

2,533

9,497

8,804

9,422

-

728

5,301

2,213

350

1,823

6,106

2,201

-

Other rental revenue

1,152

1,810

129

48

1,072

1,326

155

-

Expenses from leasing

18,100111,768

32,924

16,435

34,15945,782

26,562

29,324

Outsourcing expenses

5,650

39,242

6,940

5,502

15,565

15,635

8,380

1,129

Utilities expenses

3,841

26,968

6,581

2,478

9,154

12,323

7,156-

Land rent

642

712

-

-

-

-

-

-

Repair expenses

710

2,504

-

-

4,588

2,330

530

-

Insurance premium

97

603

321

161

358

450

274

577

-

235

235

235

235

235

430

235

Depreciation

2,661

40,232

18,451

7,805

3,914

14,155

9,417

27,353

Other expenses from leasing

4,497

1,270

393

251

341

651

373

28

Operating income (loss) from leasing

41,581

193,225

50,94938,744

161,079

113,563

77,486

165,391

NOI

44,243

233,457

69,401

46,549164,994

127,719

86,904

192,745

Parking revenue

Trust fee

* Figures are rounded down to the indicated digits.

27

SANKEI REAL ESTATE Inc.

Portfolio List

(Assets under management as of August 31, 2019)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

A-7

B-1

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Property nameTokyo
Sankei Building

BREEZÉ TOWER

S-GATENIHONBASHIHONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

ToyoPark Building

Hotel Intergate
Tokyo Kyobashi(2% co-ownership interest)(30% quasi co-ownershipinterest in sectional
ownership of the officeportion of the building,etc.)(51% co-ownershipinterest)

Location

Chiyoda-ku, Tokyo

Kita-ku, Osaka-shi

Chuo-ku, Tokyo

Chiyoda-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Koto-ku, Tokyo

Chuo-ku, Tokyo

Acquisition price

2,509 million yen

8,600 million yen

6,698 million yen

2,055 million yen

5,829 million yen

4,959 million yen

3,782 million yen

8,961 million yen

Appraisal value

2,680 million yen

9,750 million yen

7,380 million yen

2,180 million yen

6,500 million yen

5,560 million yen

3,880 million yen

9,070 million yen

2.9%

4.9%

3.8%

3.9%

3.8%

5.1%

4.5%

3.9%

Sep. 2000

Jul. 2008

Oct. 2018

Sep. 2017

Jun. 1992

Sep. 1965

Jun. 1991

Jan. 2018

99.5%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

2.3%

2.8%

2.0%

2.2%

3.1%

0.3%

9.0%

1.8%

(Appraisal date: August 31, 2019)

Appraisal NOI yield(Appraisal NOI/Acquisition price)

Construction
completion
Occupancy rate
(as of August 31, 2019)

PML value28

SANKEI REAL ESTATE Inc.

Portfolio List

(Assets acquired through 1st Public Offering)
Property number

A-2

A-8

A-9

B-2

Asset type

Office buildings

Office buildings

Office buildings

Sub assets

Property nameBREEZÉ TOWER

ShinagawaSeaside TS Tower

Omori
Park Building

Hotel Intergate
Hiroshima(15% quasi co-ownershipinterest in sectional
ownership of the officeportion of the building,etc.)(25% quasi co-ownershipinterest in sectional
ownership of the building,
etc.)

Location

Kita-ku, Osaka-shi

Shinagawa-ku,
Tokyo

Ota-ku, Tokyo

Naka-ku,
Hiroshima-shi

Acquisition price4,500 million yen

10,040 million yen

5,400 million yen

3,990 million yen

Appraisal value

4,605 million yen

10,200 million yen

5,600 million yen

4,080 million yen

4.4%

4.0%

4.3%

4.9%

Jul. 2008

Jul. 2003

May 1993

Oct. 2018

100.0%

100.0%

100.0%

100.0%

2.8%

3.2%

5.6%

2.1%

(Appraisal date: July 1, 2019)

Appraisal NOI yield(Appraisal NOI/Acquisition price)

Construction
completion
Occupancy rate
(as of August 31, 2019)

PML value

Portfolio
PML value(11 properties)

1.6%

29

SANKEI REAL ESTATE Inc.

Overview of Appraisal Value at the End of 1st Fiscal Period(Unit: million yen)
Property
number

Property nameAcquisition
priceBook value atthe end of
1st FPAt acquisition(October 31, 2018) (a)Appraisal
value

CR*1

End of 1st FP(August 31, 2019) (b)Appraisal
value

CR*1

Change(b)－(a)Appraisal
value

Unrealized
gain/
loss

CR*1

A-1

Tokyo Sankei Building(2% co-ownership interest)

2,509

2,591

2,540

2.6%

2,680

2.6%

140

0.0% pt

89

A-2

BREEZÉ TOWER (Already acquired portion)(30% quasi co-ownership interest in sectional
ownership of the office portion of the building,
etc.)

8,600

8,710

9,300

3.9%

9,750

3.9%

450

0.0% pt

1,040

A-3

S-GATE NIHONBASHI-HONCHO(51% co-ownership interest)

6,698

6,779

6,780

3.7%

7,380

3.4%

600

-0.3% pt

601

A-4

S-GATE AKIHABARA

2,055

2,082

2,080

3.8%

2,180

3.6%

100

-0.2% pt

98

A-5

Hibiya Sankei Building

5,829

6,020

5,900

3.3%

6,500

3.1%

600

-0.2% pt

480

A-6

Hatchobori Sankei Building

4,959

5,029

5,020

4.2%

5,560

4.1%

540

-0.1% pt

531

A-7

Toyo Park Building

4.2%

3,880

4.1%

90

-0.1% pt

Office buildings subtotal (total of 7 properties)
B-1

Hotel Intergate Tokyo Kyobashi

3,782

3,906

3,790

34,434

35,11835,410

8,961

9,085

9,070

37,930
3.8%

9,070

2,520
3.8%

0

-26
2,813

0.0% pt-15

Sub assets subtotal (total of 1 property)

8,961

9,085

9,070

9,070

0

-15

Portfolio total (total of 8 properties)

43,39544,20344,48047,000

2,520

2,798

Acquisition
priceBook value atthe end of
1st FP[Reference] Assets Acquired through 1st Public Offering
At acquisition(July 1, 2019)

ChangeUnrealized
gain/
loss*2

Property
number

Property name

A-2

BREEZÉ TOWER (Additional acquired portion)(15% quasi co-ownership interest in sectional
ownership of the office portion of the building,
etc.)

4,500

－

4,605

3.9%

－

－

105

A-8

Shinagawa Seaside TS Tower(25% quasi co-ownership interest in sectional
ownership of the building, etc.)

10,040－

10,200

3.6%

－

－

160

A-9

Omori Park Building

5,400

－

5,600

3.9%

－

－

200

B-2

Hotel Intergate Hiroshima

3,990

－

4,080

4.6%

－

－

Total of assets acquired in 2nd FP (4 properties in total)
23,930*1. CR is a cap rate based on direct capitalization method (NCF basis).
*2. Unrealized gain/loss = Appraisal value at acquisition - Acquisition price－24,485

Appraisal
value

CR*1

Appraisal
value

－

CR*1

90
555

30

SANKEI REAL ESTATE Inc.

Top End Tenants by Leased Area

(As of September 30, 2019, including properties acquired through 1st Public Offering)
Name of end tenant
GRANVISTA Hotels & Resorts Co., Ltd.

Business type
Hotel

Total leased area(m²)

% of portfolio’s
total leased area

15,166.7

24.1%

Property name
Hotel Intergate Tokyo Kyobashi
Hotel Intergate Hiroshima

Sony Corporation

Manufacturing(electrical equipment)

Not disclosed

Not disclosed

Shinagawa Seaside TS Tower

Bayer Yakuhin, Ltd.

Manufacturing(pharmaceutical)

Not disclosed

Not disclosed

BREEZÉ TOWER

NH Foods Ltd.

Manufacturing(food)

Not disclosed

Not disclosed

BREEZÉ TOWER

Konoike Construction Co., Ltd.

Construction

2,542.7

4.0%

S-GATE NIHONBASHI-HONCHO

Hitachi Global Life Solutions, Inc.

Service(equipment maintenance)

2,423.0

3.8%

Toyo Park Building

NEC Facilities, Ltd.

Service(facility management)

1,853.3

2.9%

Omori Park Building

Toyo Sangyo Co., Ltd.

Service(equipment maintenance)

1,509.7

2.4%

Omori Park Building

Yokogawa Solution Service Corporation

Service(equipment maintenance)

Not disclosed

Not disclosed

1,131.0

1.8%

SEGA Holdings Co., Ltd.

Manufacturing(game)BREEZÉ TOWER
Omori Park Building* “Total leased area” and “% of portfolio’s total leased area” are based on figures after considering SANKEI REAL ESTATE’s ownership interest.
* “% of portfolio’s total leased area” refers to the total leased area expressed as a percentage of the entire portfolio’s total leased area, rounded to one decimal place.
* With regard to “Total leased area” and “% of portfolio’s total leased area,” for properties for which Sankei Building is the master lessee, the areas stated in the lease agreements which Sankei Building(the master lessee) has concluded with end tenants are used as areas leased to the end tenants when calculating.
* The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, relevant party, etc. or
information from which confidential information can be derived.

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SANKEI REAL ESTATE Inc.

Status of Lease Agreements(as of September 30, 2019; based on leased area after considering ownership interest; includes properties acquired through the 1st Public Offering)

Breakdown of Tenants by Contract FormBreakdown of Tenants by Lease Period(including hotels)

Ordinary building
lease agreement

Less than 3 years

10 years or more
31.7%

33.1%

29.7%

Average*1

7.8 years
15.8%

66.9%
Fixed-term building
lease agreement

Breakdown of Tenants by Business Type

7.4%

12.1%
6.1%

Manufacturing
39.0%

Construction &real estate 6.5%

 Sony Bayer Yakuhin
 NH Foods

Less than 3 years
Etc.

Service12.3%

 Hitachi Global Life
Solutions NEC Facilities

41.8%

Average*1

20.9%

5 years or more,
but less than 10 years

3.9 years
30.0%

24.1%
Etc.

5 years or more,
but less than 10 years

Breakdown of Tenants by Lease Period(excluding hotels)
10 years or more

Other
IT

3 years or more,
but less than 5 years

22.8%

Hotel

3 years or more,
but less than 5 years

 GRANVISTA Hotels & Resorts(100% subsidiary of Sankei Building)*1. Figures are the weighted average based on the area leased to each tenant.
*2. As to the calculation of each ratio indicated above, for properties for which Sankei Building is the master lessee, the areas stated in the leaseagreements which Sankei Building (the master lessee) has concluded with end tenants are used as areas leased to the end tenants when calculating.

32

SANKEI REAL ESTATE Inc.

Status of Unitholders(as of August 31, 2019)

Breakdown of Investment Units by
Unitholder Type

Major Unitholders
Name of unitholder

Individuals/Other
16.8%
Non-Japanese corporations, etc.
11.6%

Other Japanese corporations
6.7%

Securities companies
1.4%

Financial institutions
63.1%

Number ofunits owned(units)Share ofunits owned(%)

The Master Trust Bank of Japan, Ltd.
(trust account)

53,43422.30

Japan Trustee Services Bank, Ltd.
(trust account)

46,141

19.25

Trust & Custody Services Bank, Ltd.
(securities investment trust account)

15,943

6.65

The Sankei Building Co., Ltd.

11,362

4.74

The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

7,989

3.33

STATE STREET BANK AND
TRUST COMPANY 505012

5,951

2.48

Yamato Shinkin Bank

5,650

2.35

NATIONAL AUSTRALIA BANKLIMITED - UBS CLARION GLOBALPROPERTY SECURITIES FUND

3,827

1.59

Aozora Bank, Ltd.

3,377

1.40

Trust & Custody Services Bank, Ltd.
(money trust tax account)

2,990

1.24

156,664

65.38

Total

33

SANKEI REAL ESTATE Inc.

Sponsor’s Business - Development Topics: Airport Concession Business
Concluded Basic Agreement for “Qualified Project, Etc. for Airport Operation of the Seven Airports
in Hokkaido” and Project Agreement for “Qualified Project, Etc. for Kumamoto Airport Operation”
Entered the concession business for the seven
airports in Hokkaido (New Chitose, Wakkanai,
Kushiro, Hakodate, Asahikawa, Obihiro andMemanbetsu Airports) and Kumamoto Airport

Rendering of Kumamoto Airport (planned)

Rendering of Hakodate Airport (planned)

34

SANKEI REAL ESTATE Inc.

Sponsor’s Business - Development Topics: Park-PFI BusinessAs a Group of Representatives, Selected as Holder of Preferential Negotiation Right for “Suma
Aqualife Park KOBE - Seaside Park Redevelopment Project”
With the aging of Suma Aqualife Park KOBE, launched redevelopment of approximately
101,900 m² of the park area, aquarium, accommodation facility, recreational facilities
and parking through Park-PFI system.

Area at present

Rendering (planned)
35

SANKEI REAL ESTATE Inc.

Sponsor’s Office Building Pipeline (part)and Toshima Civic Center opened on November 1, 2019, ahead of otherHareza Ikebukuro (Under development): HALL
sections
HALL, which houses a multipurpose hall operated by Toshima Mirai Cultural Foundation, and the futuristic live theater“harevutai” operated by PONY CANYON INC., a subsidiary of FUJI MEDIA HOLDINGS, INC., among others, will open on
November 1 this year.

Official website
https://hareza-ikebukuro.com

Overview (Hareza Tower)

Hareza Tower(office tower)

HALL

Toshimaとしま区民センター
Civic Center

Location

Higashi-Ikebukuro,
Toshima-ku, Tokyo

Slatedcompletion

May 2020

Total floor area

68,600 m²

ホール棟

33 floors above groundNumber of floors and2 floors below ground

HALL
Otemachi Financial City North Tower

Acquired assets

Overview
Location

Otemachi, Chiyoda-ku, Tokyo

Completion

Oct. 2012

Total floor area
Number of floors

110,000 m²
35 floors above ground and 4 floors below
groundHonmachi Sankei Building (tentative name)(Under development)
Overview
Location

Honmachi, Chuo-ku, Osaka-shi

Slatedcompletion

Aug. 2021

Total floor area

30,150 m²

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Development project / Owned
property

Location

Tokyo Sankei Building
BREEZÉ TOWER
JA Building
Keidanren Kaikan
Otemachi Financial City North Tower
Tokyo Tokiwabashi 2027
S-GATE AKASAKA
Hareza Tower
S-GATE AKASAKA SANNOS-GATE OTEMACHI-KITA
X-PRESS YURAKUCHO BLDG.
S-GATE AKIHABARA
S-GATE NIHONBASHI-HONCHO
S-GATE HATCHOBORI (tentative name)
Hibiya Sankei Building
Hatchobori Sankei Building
Omotesando Sankei Building
Toyo Park Building
Shinagawa Seaside TS Tower
Omori Park Building
Namba Sankei Building
Honmachi Sankei Building (tentative name)

Otemachi, Chiyoda-ku
Umeda, Kita-ku, Osaka-shi
Otemachi, Chiyoda-ku
Otemachi, Chiyoda-ku
Otemachi, Chiyoda-ku
Otemachi, Chiyoda-ku
Akasaka, Minato-ku
Higashi-Ikebukuro, Toshima-ku
Akasaka, Minato-ku
Uchi-Kanda, Chiyoda-ku
Yurakucho, Chiyoda-ku
Higashi-Kanda, Chiyoda-ku
Nihonbashi-Honcho, Chuo-ku
Hatchobori, Chuo-ku
Yurakucho, Chiyoda-ku
Hatchobori, Chuo-ku
Kita-Aoyama, Minato-ku
Toyo, Koto-ku
Higashi-Shinagawa, Shinagawa-ku
Omori-Honcho, Ota-ku
Minatomachi, Naniwa-ku, Osaka-shi
Honmachi, Chuo-ku, Osaka-shi

Year ofcompletion

Development bysponsorOperation and managementby sponsor

2000
2008
2009
2009
2012

●
●
●
●
●
●
●
●
●
●
●
●
●
●

●
●
●

(Under development)

2015(Under development)

2016
2017
2017
2017
2018
(Under development)

1992
1965
1994
1991
2003
1993
2005
(Under development)

●
●

●
●
●
●
●
●
●
●
●
●
●
●

●
●
●

36

SANKEI REAL ESTATE Inc.

Profile of the Asset Management Company
Trade name

Sankei Building Asset Management Co., Ltd.

Established

April 13, 2018

Capital

100 million yen

Shareholder composition

The Sankei Building Co., Ltd. 100%

Main line of business

Investment management businessDirectors and auditors

5 directors and 1 auditor

Financial instruments businessregistration

Director-General of the Kanto Local Finance Bureau
Registration (FIBO) No. 3094

Real estate brokerage license

Governor of Tokyo License (1) No. 102209

Discretionary transaction agency,
etc. approval

Minister of Land, Infrastructure, Transport andTourism Approval No. 125

General Meeting of Shareholders
AuditorBoard of Directors
Investment Committee

Compliance Committee
President and CEO
Compliance Office

Investment Management Department

Finance & IR Department• Investment policy planning• Acquisition and sale of assets undermanagement• Corporate planning, accounting andgeneral affairs• Operation and management ofassets under management• Financials and IR

37